By Chino S. Leyco
The Department of Finance (DOF) said that the rate of increase in consumer prices registered in December continued to be supply-side driven, noting the government needs additional measures to further streamline the country’s supply-chain.
Based on the latest DOF economic bulletin, Finance Undersecretary Gil S. Beltran, said the “drastic deceleration” of inflation, which clocked in at 5.1 percent in December, was a result of stabilizing food prices, specifically rice, along with transportation services.
Beltran, who is also the DOF’s chief economist, explained the decline is attributable to streamlining of the supply chain, including for imported goods, upon the signing of several administrative orders and memorandum circulars last November.
In the fourth-quarter 2018, the President signed an executive order removing administrative and non-tariff barriers on food imports, and “zero in” on fish, rice, sugar, meat and vegetables.
The Presidential order aims to moderate the elevated inflation seen in the second and third quarters of 2018.
Month-on-month, inflation declined 0.6 percent and settled at 5.1 percent in December from 6.0 percent in November.
Beltran said “this comes amid stabilizing food prices, specifically rice. Non-food prices, namely transportation services, also decelerated after the LTFRB [Land Transportation Franchising and Regulatory Board] recalled the fare increase, which, in turn, was on the grounds of declining fuel prices.”
In 2018, inflation averaged at 5.2 percent, above the upper band of the Bangko Sentral ng Pilipinas’ (BSP) 4.0 percent, and higher than the 2017 average of 2.9 percent.
But the finance official said that inflationary momentum is also easing, noting core inflation in December slowed down to 4.7 percent and on a month-on-month basis, the general price level declined by as much as 0.6 percent.